Power provider Exelon’s clean energy branch, which includes its nuclear power plants, lost $250 million in the second quarter. That was a drastic drop from the $8 million non-adjusted loss Exelon Generation reported for the same three-month period of 2016, according to the company’s earnings update Wednesday.
Still, executives had cause for optimism about their nuclear business this week after federal courts in Illinois and New York state last month dismissed lawsuits to block state programs that would provide zero-emissions credits (ZEC) to Exelon nuclear power plants, executives noted.
“These wins are strong affirmations of the ZEC program design,” CEO Chris Crane said Wednesday during the company’s quarterly earnings conference call with investor analysts. “More importantly, these wins will support the continued operation of at-risk nuclear plants providing clean, affordable energy for our customers for many years to come. Needless to say, we are pleased with the results.”
Exelon Generation’s non-generally accepted accounting principles earnings for the quarter dropped from $328 million in second-quarter 2016 to $202 million this year. The company attributed the decline to several developments: the March end of the reliability support services agreement that helped sustain the R.E. Ginna nuclear plant in New York; a larger number of outage days at Exelon’s nuclear plants; and reduced realized energy prices.
Those were to some degree counteracted by revenue from zero-emission credits provided to nuclear power operators by New York state’s Clean Energy Standard, the earnings report says. Exelon Generation operates the R.E. Ginna, Nine Mile Point, and James A. FitzPatrick nuclear plants in upstate New York.
Prior owner Entergy had planned to close the FitzPatrick facility prior to the sale to Exelon, which was dependent upon state approval of the credits program. Exelon had also scheduled its two nuclear facilities in Illinois, Clinton and Quad Cities, for closure prior to lawmakers there enacting their own zero-emission energy production awards.
The Electric Power Supply Association and other plaintiffs have already appealed the decision in Illinois, and an appeal is likely in the New York ruling, said Joseph Dominguez, Exelon’s executive vice president for government and regulatory affairs and public policy.
During the second quarter, Exelon also announced the closure of its Three Mile Island nuclear plant in Pennsylvania no later than Sept. 30, 2019. “A program that fairly compensates the plants for zero-emission energy, similar to what we have seen in New York and Illinois, is needed in order to continue operations,” Crane said.
Exelon’s full earnings were impaired by the drag from its Generation business; all other branches reported positive earnings. The company’s total GAAP net income fell from $0.29 per share in second-quarter 2016 to $0.09 in the latest reporting period; non-GAAP adjusted earnings looked better, landing at $0.54 per share, compared to $0.65 last year.
Chief Financial Officer Jonathan Thayer said the company still anticipates full-year earnings of $2.50 to $2.80 per share.
